House passes amendment blocking OFAC Cuba rule

The House voted to try again to block enforcement of a Treasury Department rule that farm groups say has reduced agricultural trade with Cuba by 22 percent since it was implemented in February 2005.

House members approved by voice vote a Transportation-Treasury spending bill amendment that would prohibit the Treasury Department from using funds to enforce the rule issued by the latter's Office of Foreign Assets Control. The rule requires Cuba to pay for U.S. agricultural products before they leave U.S. ports.

The amendment introduced by Rep. Jerry Moran, R-Kan., was passed by the House and Senate last year but was withdrawn in the Treasury-Transportation appropriations conference committee after President Bush threatened to veto the bill because of the provision.

Moran, chairman of the House General Commodities Subcommittee, said he and other farm-state congressmen will continue to fight to block enforcement of the rule, which he said has led to a 22 percent reduction in U.S. farm product shipments to Cuba.

“What happened in February 2005 makes no economic or commercial sense,” he said. “At least in the agricultural world, there is an understanding that unilateral sanctions such as those imposed on Cuba don't work.”

Moran said the Treasury Department OFAC rule means the Cuban government has to pay for the time that ships hauling ag products to Cuba wait in U.S. ports for payment to be accepted.

“This is really about a noncommercial reason, just trying to make the trade more onerous, more expensive, so that our farmers have less of an opportunity to export their goods to Cuba,” he said.

Congress ended a 40-year-old ban on the shipment of food and agricultural products to Cuba when it passed the Trade Sanctions Reform and Export Enhancement of 2000.

A USA Rice Federation spokesman says the Office of Foreign Assets Control rule requiring the Cuban government to pay for such shipments before the ships leave the harbor has complicated Cuban efforts to purchase U.S. rice.

“They are still purchasing rice, but it is more difficult than it used to be,” said Stuart Proctor, president and CEO of the Arlington, Va.-based federation. “Cuba wants to buy U.S. rice, but our government is still trying to impose new restrictions to keep us out of this market.”

Cuba was the No. 1 market for U.S. rice before Fidel Castro came to power in 1959, buying about 500,000 metric tons annually with most of the shipments originating in the United States.

“Today it's a 750,000-ton market, and it's primarily a Vietnamese market,” said Proctor. “We have had some success working with the Cubans to get them to buy U.S. rice, but we're selling 180,000 to 200,000 metric tons, as of last year. This should still be a 500,000-ton market for us.”